It’s difficult to go a month or even just a few weeks without hearing of another for-profit college being under investigation for unscrupulous practices, such as inflated job placement rates and pushing students into costly student loans. New legislation announced today aims to curtail the number of investigations we hear about by protecting students from predatory, deceptive, and fraudulent practices in the for-profit college sector, before they even enroll.

The Protections and Regulations For Our Students Act – also known as the PRO Students Act – would, among other things, ensure that students have access to accurate information and data about schools, strengthen oversight and regulation governing the for-profit college industry, and hold schools accountable for violations and poor performance.

California Representative Mark Takano announced the bill during a press conference on Thursday afternoon saying the legislation would ensure that student and taxpayer funds are being well spent, and that students are receiving quality, affordable education.

“It is critical that our students are able to make informed decisions about where they will receive the quality, affordable higher education that is right for them,” Takano said in a summary [PDF] of the PRO Students Act prior to the announcement Thursday. “Unfortunately, some schools, particularly those in the for-profit college sector, are employing predatory, fraudulent, and deceptive practices to enroll students, and then leave them with unsustainable debt, worthless credits, certifications, and degrees, and dismal job prospects.”

The PRO Students Act includes provisions that:
• Require proprietary institutions to derive at least 15% of their revenue from non-federal student aid and ensure that military and veterans’ education benefits are included in that calculation.

• Prohibit schools from using revenues derived from federal student aid for recruiting and marketing.

• Launch a complaint tracking system for students to report grievances.

• Establish a Proprietary Education Oversight Coordination Committee and create a framework for targeting and prioritizing program reviews by the Department of Education.

• Strengthen sanctions for violations, establish a Student Relief Fund, and bolster consumer protections for students.

• Improve the quality of and access to key information, such as the student default risk index, cohort default rates, loan repayment rates, degree completion rates, and accreditation documents.

• Prohibit pre-dispute arbitration clauses in loan contracts that waive the rights available to borrowers against loan servicers.

• Prohibit incentive compensation based on recruitment or academic success.

• Strengthen whistleblower protections for faculty and staff. The legislation is co-sponsored by California Rep. Susan Davis and Tennessee Rep. Steve Cohen.

Rep. Mark Takano to Introduce Higher Education Regulation Legislation to Protect Students [Mark Takano]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.